Business Travel Bounces Back. (Business Travel)
As Asia slowly begins to emerge from recession, and the shock effect of 11 September wears off, business travellers are once again taking to the skies and jetting around the region--much to the relief of those in the industry.
General manager of the Portman Ritz-Carlton Shanghai Mark DeConcinis said earlier this year that "the improvement of the world economic situation will be critical to us in Asia this year".
Now, he reports an increase in foreign business travellers, particularly from North America and Europe.
"We have many small companies coming to research and the Fortune 500 companies are expanding their offices as a result of WTO (China's entry)", DeCocinis says.
Airlines are enjoying the fruits of this growth too--a recent Dow Jones report shows Asian airlines to be climbing once again, with grounded planes returning to meet increasing demand.
This positive recovery has been attributed to smart capacity management, reduced fuel costs and a strong regional economy.
Higher passenger numbers and lower fuel costs helped Cathay to report a 6.8 per cent jump in first-half net profit to HK$1.41 billion ($335.5 million), and Korea Airlines to achieve a return-to-profit in the fiscal second quarter ended 30 June.
Cathay's fuel costs came down 20 per cent in the first half, and in Singapore and Hong Kong fuel is about 16 per cent cheaper than it was a year ago. Another airline doing well is Thai Airways International PCL. Latest profit figures were not available at the time this article was produced, but the airline recently reported a proposal to acquire a large number of new aircraft, possibly up to 16, over the next few years.
Analysts welcomed the move, saying it was a necessity to accommodate growth, as well as cutting maintenance costs.
On the Australian front, Qantas is renewing its focus on increasing international travel, the company's main source of revenue.
In the six months to 31 December, Qantas' net income fell 41 per cent to $153.5 million after the 11 September slump in global air travel.
However, the failure of rival airline Ansett Holdings Ltd, in September 2001 helped Qantas raise its share of the Australian market by half to about 80 per cent, shielding it from most of external woes.
Chief executive Geoff Dixon now wants to expand Qantas' share of international traffic as more travellers fly abroad, according to analysts.
Eric Betts, an equities strategist at Nomura Australia, said that things would remain challenging for Qantas, but the company was on the ball.
"They never sit back and rely on external factors that much," says Betts.
Qantas shares have gained 45 per cent in the past 12 months, making it the second-best performing stock among airlines. …